Chinese wine market continues to contract

By Mathew Lyons

Published: 14 January, 2016

The Chinese wine market continued to fall last year, according to the Shanghai Daily newspaper.

Consumption of red wine, which dominates wine sales in China with a 75% market share, fell 5% in 2015 from 139.14 to 131.9 million cases, the paper reports.

China remains the fifth largest market in the world, however, with French wines accounting for 42% of all imports.

Australia is now the second largest exporter of wines to China, with four million cases sold last year.

Imports of Spanish wines were up 55.6% year on year for the first five months of 2015.

Sales of domestic wines are in decline due to both short-term profiteering from wineries and the growing sophiscation of the market.

"Many profit-driven Chinese wineries, trying to be paid back quickly, sell wines to distributers in an unreasonably high price, although the cost of making wine in China is much lower than Bordeaux," Lu Mengxi, a winemaker in Ningxia Hui Autonomous Region, west China, told the paper.

Prices of domestic wines can be double those imported from Bordeaux.

Stephen Li, a widely respected wine educator in China, said: "Formerly, Chinese consumers blindly follow domestic wines since they cannot read French or English labels on imported bottles.

"However, when young and well-educated middle-class becomes the major wine buying power in China, many Chinese wines are found increasingly hard to compete with valuable imported bottles."

Global analyst Mintel has predicted that the Chinese market will stabilise at around 5% annual growth for the rest of the decade.

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